BURLINGTON — Mayor Emma Mulvaney-Stanak on Tuesday announced that her administration had identified a “range of revenue sources and cost saving” measures to close a projected $13.8 million budget deficit.
Mulvaney-Stanak, who took office in April, is proposing raising an additional $5.6 million in tax revenue, largely from an increase in the city’s gross receipts and hotel taxes. Her plan would also rely on $3.7 million in American Rescue Plan Act funds, $2.5 million from cost-saving measures that include leaving vacant positions unfilled, and $1.5 million from increases to user fees.
The projected deficit in recent months had ballooned from $9 million to $13 million due to a miscalculation of employee benefit costs and other increasing expenses.
“We set out with a goal of creating a budget that prioritized affordability for residents and sustainability of city operations,” Mulvaney-Stanak said at a press conference Tuesday morning. “We did this fairly — asking both residential taxpayers and the business community to contribute to closing the gap.”
The Progressive mayor’s $107.8 million budget would increase the city’s gross receipts tax, which covers meals, alcohol, amusements and admissions, from 2 to 2.5%. The city’s hotel tax, meanwhile, would increase from 2% to 4%, while the short-term rental tax rate would remain unchanged.
The gross receipts tax increase would sunset after one year, according to Katherine Schad, Burlington’s chief administrative officer.
Mulvaney-Stanak has proposed increasing the city’s public safety tax by two cents instead of the three cents approved by voters on Town Meeting Day. She said she made that decision to “guard against increasing taxes more for residents in particular,” instead opting to spread out tax increases across different sectors of the city.
The use of one-time funds to close the budget gap — a common practice Vermont municipalities have used in recent years — is one that Mulvaney-Stanak hopes to end as the city begins work this summer on its fiscal year 2026 budget.
“That is not unique to Burlington, sadly — many communities have done this,” Mulvaney-Stanak said. “We had historic investments from the federal government for very important work and very important needs. However, we have to get right-sized.”
Schad said that while the city had previously committed the remainder of its ARPA funds, programs that received the funds had “small balances left,” to the tune of $2.3 million.
The administration is also proposing redirecting some ARPA funds away from current projects — including the Moran Frame, for example.
User fees, or various application fees charged by the city, would also increase under the proposed budget to better reflect operational costs for some city programs, including in the city’s fire and public works departments, Mulvaney-Stanak said.
Her budget proposal doesn’t include layoffs, but would save $1.4 million by keeping 22 positions vacant. It would also set aside money for hiring 10 more police officers— “a number provided by the department that reflects their best estimate on the number of officers they can actually hire” in the upcoming year, the mayor said.
City Council President Ben Traverse, D-Ward 5, lauded the administration for proposing a balanced budget “without requiring any layoffs of our amazing city employees.”
“As we consider how to move forward, we need to learn more about what the true cost of this proposal will be for Burlington residents and businesses, the impact on existing city programs, and whether we are building a sustainable budget that will avoid our being in this same place one year from now,” he said in an interview Tuesday.
The anticipated deficit marks Mulvaney-Stanak’s first major challenge as Burlington’s mayor.
At the press conference Tuesday, she said she hopes to move the city to a three- to five-year budget cycle conversation “so we’re not compacting critical, really hard conversations and questions into a three-month span.”
“That’s not great decision making — not only for the administration, but also for the city council to be good collaborators, and then of course, the public to know even what’s going on,” she said.
The city council will review each department’s budget this month, and is expected to review and approve a budget by June.
Correction: An earlier version of this story misstated which tax increases would sunset after one year.
